Racial Disparity and the Intergenerational Persistence of Income and Family Structure: A Dynamic Model of Racial Inequality Trends

Deirdre Bloome, Harvard University

Racial disparity in family incomes remained remarkably stable over the past 40 years in the U.S. The socio-legal environment changed substantially, but the dissimilarity of the income distributions of black and white families did not change commensurately. In this paper, I examine the relative contributions of demographic and economic trends to the maintenance of racial inequalities in family income over time. I combine cross-sectional decomposition analysis using Current Population Survey data with panel analysis of intergenerational mobility using data from the Panel Study of Income Dynamics, Census, and National Vital Statistics. By studying dynamic processes underlying cross-sectional inequality trends, we improve our understanding of how historical disadvantage is perpetuated. Results suggest that while economic trends were equalizing, demographic trends were disequalizing. Poverty is more persistent and affluence is less persistent among black families than white families, but mobility differences do not account for observed trends in racial income inequality.